My sister was a special ed. teacher in San Diego--when she started, she was making somewhere between $30-40K/year. Teacher's salaries are public, so we could look up what the current salary scale is, but I doubt it will have changed significantly. During the summer, teachers often take classes towards their certification. Later, some may take a job somewhere like a bookstore or home depot, which offers seasonal work. Many pay for supplies for students out of their own pocket. Tell me, is that a princely salary? Is that over compensated? In the past, you had a trapped population (women), so even with modest salaries, you could attract good people--now, many teachers are not that strong academically (and yes, I know that you need to be skilled at teaching--but subject matter competence is part of that--I did some volunteering during grad. school with a local middle school and even among some very motivated teachers, their math skills were very poor--at even the basic algebra level. One had trouble going from distance=rate*time, to finding time given distance and rate). Sure, you'll get some good people who still will go into the field for love, but I doubt that you would argue that just because you can find some software developers who will work for 25K/year and there are some unemployed developers, that you're going to get GOOD developers living in LA working at that salary (and no equity).

The effective "trapping" of women to only work in education and nursing was a huge subsidy to those fields. It seems like the US education system (quality and cost) and medical system (cost, at least) started to really fall apart around when women had other career options.

If you have a fixed amount of money to spend, you can either buy fewer items, or pay less per item. It's due primarily to union contracts that schools are buying fewer items.

If they reduced the compensation of teachers (i.e., reduce price in response to a demand decrease), there would be no need to reduce the number of teachers.

But there is no decreased demand. In fact, in many communities there is increased demand. Education (like health care) is not amenable to overly simplified economic models, because (like health care) it's not an optional expense. The right answer might be to increase teacher salaries, bringing compensation on par with other professionals and thus attracting more qualified people, who in turn produce better-educated students, who in turn improve the local economy, providing greater tax revenue and more money to pay for the higher salaries.

You're making the mistake of inferring demand from the budget, which is exactly the overly simplistic economic analysis I was warning about. If inflation raises the price of all goods, does that show increasing real demand? Of course not. In this case, not only are there not fewer kids demanding education, there are actually more of them, and offering (proportionate to the tax revenue available) the same 'price' as they were before. The fact that the tax revenue contracted does not in any way indicate a lessening in real demand, any more than inflation reflects a real increase in demand.

This is economically incompetent and probably ideologically motivated. All that you can conclude from the DoE statement is that if 280,000 teachers employed under the Jobs Act were to find themselves unemployed, then they would be unemployed. They say absolutely nothing about the demand curve before or after the Jobs Act. Other comments pointed out the economic circumstances that would have made Federal funding of a public good necessary to make up for the local government shortfall. My condolences to your deceased neurons.